Flying Donkey

Saturday, January 28, 2006

India Acendant

Read any business magazine in the US or go to any conference, India is all the rage. While US grew at 1.1% annual rate last quarter (Economic Times), India grew at a robust 8% (CSFB estimates).

China is still the #1 destination for foreign investors, but this is poised to change soon, if you believe Prof. Yasheng Huan of the MIT Sloan School of Business (Financial Times Jan 24). He cites various reasons for the projected slowdown of the Chinese economic juggernaut. The gist is as follows:

1. Political unrest resulting from authoritarian centralized regime.
2. High unemployment rates in rural areas.
3. Restive muslim population in Western China.
4. Weak banking system and general anemia in financial institutions.
5. Large scale corruption.

Indeed, some of these things are common to India as well, but India has the safety valve of a democratic system, which China lacks.

India has arrived and not necessarily because firangs are talking about it. I think India arrived with the birth and coming to age of the Gen-X, which was devoid of any colonial hangover and the resulting inferiorities.

Indians of this generation grew up with a much greater exposure to the West resulting from opening up of the cable TV and increasing literacy rates. Y2K was simply a catalyst for helping unleash the Indian technology talent. Had Y2K not happened, something else would have happened. It is just not possible to control the fire when ample fuel is available.

6 Comments:

  • u think democracy is safe!!!!!

    that is a questionable notion.... i have an socio economic argument against democracy. if u are interested i can email u that one.

    neverthless it is the best of the worst options... thats all what he did.

    By Blogger laks, at 11:08 AM  

  • This comment has been removed by a blog administrator.

    By Blogger laks, at 11:08 AM  

  • i meant that democracy being safe is a questionable notion

    and also i am confused about what kinnd of governance would be fit for india.

    By Blogger laks, at 11:10 AM  

  • Came to your blog thru your comments on green satya's blog.

    I just wanted to make a point abt the employement scene in India viz a viz our demographic profile:

    If u look, our demographic profile can be a two edged sword.
    Its very important to recognise that one of the major threats facing India is the unemployement rate. Sure services sector is rising and all, and there is great demand there. But a chunk of our youth are not from educated background of the desired levels. They donot have education levels to target for these jobs. If you dissect the numbers properly, the employement rate for these set of ppl has actually fallen. I see no responses to this worry yet.

    By Blogger RR, at 10:16 PM  

  • Laks: Democracy is indeed messy and far from perfect. It has the danger of turning into "tyranny of the majority." But at this point, it provides the common man with the best chance of being heard.

    Sher-e-jallandhar: Unemployment is indeed a big problem, as is the 70% of the population engaged agriculture, despite its 20% share of GDP.

    By Blogger Nachiketa, at 4:37 PM  

  • Hi,
    I found your blog via google by accident and have to admit that youve a really interesting blog :-)
    Just saved your feed in my reader, have a nice day :)

    By Anonymous Anonymous, at 3:25 PM  

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